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Washington – Exemption for Dairy Product Manufacturers

SALT Report 2908 – The Washington State Legislature enacted legislation that amends and expands the B&O tax exemption and the preferential B&O tax rate available to dairy products manufacturers.

The B&O tax exemption provided in RCW 82.04.4268 to manufacturers of dairy products was amended to include wholesale sales by dairy product manufacturers to a purchaser who will use the dairy products as an ingredient or component in the manufacturing of another dairy product. This exemption will expire on July 1, 2015.

In addition, the B&O tax rate of 0.138% that will be provided to dairy product manufacturers under RCW 82.04.260, has been expanded to include wholesale sales of dairy products to a purchaser for use as an ingredient or component in the manufacturing of another dairy product in Washington. This amendment is effective July 1, 2015 and will expire on July 1, 2023.

The Department of Revenue is in the process of writing a Special Notice to provide additional guidance regarding these amendments.